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1 Sep 2015
ECB and Polish MPC – Less Action Expected - Bank Zachodni WBK S.A.
FXStreet (Delhi) – Analysts at Bank Zachodni WBK S.A. note that ECB and Polish MPC meet in September is expected to yield very less action and may even turn out to be a non-event. ECB is likely to comment on the issue of the recent turmoil in China and drop in commodity prices. As regards with the Polish MPC, rates in Poland are very likely to be left unchanged this week and are not expected to have a big impact on the zloty or bonds.
Key Quotes
“Last week the ECB’s chief economist said that the QE could be extended should reaching the inflation target be less likely due to the recent global developments. If Mario Draghi also sounds dovish, then the risky assets in Europe, including the zloty, could gain.”
“The second, next to the ECB meeting, event that the market will be waiting for this week is the US nonfarm payrolls data. After the recent turmoil in the global market, investors have postponed their expectations for the first Fed rate hike and even the Fed’s Dudley, who used to be a declared supporter for the September’s hike said that now it “seems less compelling”. However, this did not support the zloty and Polish bonds as the market has become more concerned about the global economic activity.”
“As regards this week’s US data, we think that both strong disappointment and number significantly above the consensus could weigh on the Polish assets – in the first case amid likely sharp deterioration of the global market mood amid worries about the next global crisis and investors’ retreat from the risky assets; in the second – due to weaker mood in the EM as the September’s Fed rate hike will become more likely.”
Key Quotes
“Last week the ECB’s chief economist said that the QE could be extended should reaching the inflation target be less likely due to the recent global developments. If Mario Draghi also sounds dovish, then the risky assets in Europe, including the zloty, could gain.”
“The second, next to the ECB meeting, event that the market will be waiting for this week is the US nonfarm payrolls data. After the recent turmoil in the global market, investors have postponed their expectations for the first Fed rate hike and even the Fed’s Dudley, who used to be a declared supporter for the September’s hike said that now it “seems less compelling”. However, this did not support the zloty and Polish bonds as the market has become more concerned about the global economic activity.”
“As regards this week’s US data, we think that both strong disappointment and number significantly above the consensus could weigh on the Polish assets – in the first case amid likely sharp deterioration of the global market mood amid worries about the next global crisis and investors’ retreat from the risky assets; in the second – due to weaker mood in the EM as the September’s Fed rate hike will become more likely.”